January 16, 2021
While speaking during the session on Beyond Ease of Doing Business Rankings organised by CUTS International at SKOCH Public Policy Forum, Suresh Prabhu, Member, Rajya Sabha, pointed out that entrepreneurs take risks despite several externalities. They should be honoured for their contribution to the society and not subject to additional externalities in form of unwarranted and unnecessary intrusions by the state.
Prabhu also conferred the SKOCH Challenger Award to Pradeep S Mehta, Secretary General, CUTS International, for his contributions to public policy on competition, and lauded his role in bringing vibrancy in public policy space.
Mehta pointed out that the ease of doing business efforts of the government fall short on inclusivity and representativeness. Climbing charts has become an end in itself and the stated objective of making life easier for entrepreneurs appears to have taken a back seat.
“There is a need to institutionalise frameworks like Regulatory Guillotine and Regulatory Impact Assessment to address the problem of stock and flow of unreasonable regulations, licenses, and compliances, with the objective of ensuring ease of living for micro, small, informal and women-led enterprises, and moving beyond rankings,” Mehta quipped.
Manish Sabharwal, Chairman, TeamLease, highlighted that there is a need to realise that freedom to entrepreneurs funds the welfare state. We need to overcome three types of deficits: execution deficit of government, trust deficit of industry, and scale deficit of non-profits. At present, there is a difference in how regulations are written, interpreted, practiced, and enforced, which creates substantial uncertainties.
Sabharwal called for comprehensive civil service reforms including effectively using provisions of transfers and promotions to ensure accountability. In the immediate term, he called for constitution of a Compliance Commission with a mandate to rationalise, decriminalise, and digitise compliance.
Reema Nanavaty, Leader, Self Employed Women Association, highlighted additional hardships faced by women entrepreneurs, particularly during the lockdown. She pointed to practical challenges like inability to access government benefits and difficulties in accessing finance, despite stellar repayment track record of women borrowers.
Nanavaty called for creating a new kind of financing instrument in form of relief fund, which can practically aid vulnerable entrepreneurs and make their lives easier.
Srivinas Rao, CEO, Global Alliance for Mass Entrepreneurship, highlighted that the annual direct and indirect cost of compliance for MSMEs is INR 12 lakhs, which fosters informality. This prevents MSMEs from benefitting from formal financial services, and impedes scaling up. He called for a less complex compliance landscape to enable businesses embrace formality and scale up.
Sameer Kochhar, Founder, SKOCH Group, emphasised on the need for equal emphasis on ease of living and ease of doing business. The discussion was followed by a likely question and answer session with the audience. Over 700 stakeholders from government, civil society, academia, think tanks, industry, among others, participated in the discussion.
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